A problem with small-dollar fundraising

10/8/12 9:48 PM EDT

In Newsweek, Peter Schweizer and Peter Boyer draw a bright line under a gap in the federal campaign finance system that could allow foreign nationals and other questionable donors to put money into American campaigns — in the event that those campaigns don't monitor their own receipts vigilantly:

Campaigns that aggressively raise money online are soliciting donations from people around the world — whether they intend to or not. People repost campaign solicitations on blogs that send them sprawling around the globe like digital kudzu. For example, an Obama campaign official posting ended up on Arabic Facebook, complete with a hyperlink to a donation page. In another instance, someone posted videos on Latin American websites featuring Sen. Marco Rubio, and included embedded advertisements asking for campaign donations. …

The Obama campaign says that it is rigorous in its self-regulation effort. “We take great care to make sure that every one of our more than 3 million donors are eligible to donate and that our fundraising efforts fully comply with all U.S. laws and regulations,” says campaign spokesman Adam Fetcher. Campaign officials say they use multiple security tools to screen all online credit-card contributions, and then review, by hand, those donations that are flagged by their automated system. Potentially improper donations, such as those originating from foreign Internet addresses, are returned to any donors who cannot provide a copy of their current U.S. passport photo pages, the campaign says.

But the weakness of the current system isn’t particular to any campaign. It’s a broad reliance on self-policing combined with a lack of transparency. Foreign or fraudulent donations might be less of a concern if it were possible for outsiders — the press, the public, good government watchdog groups, or the Federal Election Commission — to independently determine whether they were taking place. But it isn’t. Candidates need only publicly report campaign contributions over $200. For donations between $50 and $200 (the average donation in Obama’s huge September haul was $53), candidates are simply required to make an effort to obtain accurate identifying information — information they aren’t required to report. And for donations under $50, regulations don’t even require campaigns to keep a record of identifying information.

Conservatives are seizing on the story to raise questions about Obama's fundraising and the rigorousness of his campaign's self-policing, and it stands to reason that a candidate of the president's global and social-media reach, these kinds of donations present a new kind of challenge.

I spoke to Schweizer, who's associated with the Government Accountability Initiative and helped raise the hue and cry over congressional insider training that led to the STOCK Act, earlier today. And he pointed out that the questions in play here aren't just about Obama (or Rubio, mentioned above) or about the 2012 campaign. The whole idea of disclosing donations over $200 only has its limitations in a world where it's awfully easy to donate money over the Internet, and American political campaigns draw above-average interest overseas.

"Our hope is that the campaigns will disclose the names of all their contributors, even those that are under $200, and that the campaigns will institute transparent and open security. And I think the FEC needs to look at creating a, sort of, minimum standard of security," Schweizer said. "Given the scope and the scale and given the interest in U.S. elections, the potential for this to be millions of dollars is very real."